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The Great Debate©: Will Dodd-Frank be Effective?

Written by Elliott Morss, Bradley G. Lewis and William K. Black

Editor’s note: The question of whether the 2010 Dodd-Frank Act will be effective in reducing systemic risk in the financial sector was brought into new focus by a a featured article written by Gabriel Sherman last month in New York magazine.  Sherman discussed ways in which the legislation is having impact on banking and the financial system.  That article prompted thoughts about some of the yet unanswered questions about Dodd-Frank implementation by three contributors to Global Economic Intersection.  The three essays are a natural combination for presenting additional sides of this multidimensional question.  The articles presented here in this Great Debate© are:

  • “The Big Banks Just Keep on Growing” by Elliott Morss
  • “Dodd-Frank and the Size and Scope of Financial Institutions” by Bradley G. Lewis
  • “Dodd-Frank:  Incoherent Analytics Produces Incoherent Reform” by William K. Black

Click on cartoon for larger image.

The Big Banks Just Keep on Growing

by Elliott Morss, former IMF Economist

Introduction

Gabriel Sherman points out that the Volcker Rule is included in the Dodd-Frank Act.

Where is it? Title VI, Sec. 619, (a)(1) reads:

“Unless otherwise provided in this section, a banking entity shall not– (A) engage in proprietary trading; or (B) acquire or retain any equity, partnership, or other ownership interest in or sponsor a hedge fund or a private equity fund.…in no case may the aggregate of all of the interests of the banking entity in all such funds exceed 3 percent of the Tier 1 capital of the banking entity.”

Sherman reports on what a number of financial houses are doing to comply with Dodd-Frank:

  • Sherman quotes JPMorgan Chase CEO Jamie Dimon:

“Certain products are gone forever….Fancy derivatives are mostly gone. Prop trading is gone. There’s less leverage everywhere. Mortgages are back to old-fashioned conservative mortgages….”

  • Sherman on Goldman Sachs:

“Months before the Volcker Rule is set to kick in, star traders began to leave in droves. In March 2010, Pierre-Henri Flamand, the London-based global head of Goldman’s Principal Strategies group, quit…. in September, Goldman revealed it was shuttering its entire desk…. Goldman was the first of the major banks to announce it was shuttering its internal hedge funds.”

  • Sherman on Morgan Stanley:

“…Morgan Stanley announced …it was getting out of prop trading entirely. The bank decided to spin off its secretive Process Driven Trading unit, a 70-person desk run by Peter Muller…after disbanding Muller’s group, Morgan Stanley announced it had finished spinning off FrontPoint Partners, a multibillion-dollar hedge fund….”

  • And on Citigroup:

“Citigroup announced that it, too, was closing its prop-trading desk.”

Other Perspectives

The Sherman article certainly gives the impression that Dodd-Frank has teeth and that a real deleveraging revolution has started in the banking industry.  But before accepting this as fact, let’s look at September 2011 FDIC data on banks.  Table 1 provides information on the four largest U.S. banks.  The table includes values for the end of September 2011 and the percent change since June 2007 (before the banking collapse). It appears the big banks are getting bigger:

  • Employment has grown significantly for all but Citibank.
  • Total assets are up as well, with each bank having more than $1 trillion (note there are only 15 countries with GDPs in excess of $1 trillion).
  • The banks are getting out of trading? Why then for all but Bank of America, are trading account assets up? Why then, for all but JP Morgan Chase, are derivatives up significantly?

The table also includes data on Tier 1 assets as a percent of deposits.  These have understandably strengthened since 2007. And certainly, a Fed policy requiring a doubling of these reserves will have a significant impact.

Click on table for larger image.

Another Look at Dodd-Frank

But let’s return to Dodd-Frank.  While there is Volcker language in it, the Act also says in Title VI, Sec. 619, (b)(1):

“Not later than 6 months after the date of enactment of this section, the Financial Stability Oversight Council shall study and make recommendations on implementing the provisions of this section so as to–(A) promote and enhance the safety and soundness of banking entities….”

In short, the bill calls for federal financial regulators to study the measure, and then issue rules implementing it based on the results of that study.

Just after the Bill was enacted, I quoted from an article by Binyamin Appelbaum in The New York Times predicting what would happen next:

…Brett P. Barragate, a partner in the financial institutions practice at the law firm Jones Day, estimated that Congress had fixed in place no more than 25 percent of the details of that vast expansion….  Interest groups have been preparing for months.  When the Consumer Bankers Association convened its annual meeting in early June, there was still plenty of time to lobby Congress.  But the group’s president, Richard Hunt, told his board that the group should shift its focus to the rule-making process. The board voted to increase the group’s budget and staff.  ‘Now we hope to have a good give and take with the regulators on the best interests of the consumer and the industry,’ said Mr. Hunt….  One clear consequence is a surge in the demand for lawyers with expertise in financial regulation, particularly those who have worked for regulatory agencies. Most of the major trade groups are hiring lawyers. The major banks say they are employing more, too.”

So who will be on this Financial Stability Oversight Council? It will be chaired by the Secretary of the Treasury Geithner – a tax cheat looking forward to a job in the financial industry.  Other members: the Chairman of the Fed, the Comptroller of the Currency, the Director of the Bureau of Consumer Financial Protection Bureau, the Chairman of the Securities and Exchange Commission, the Chairperson of the Federal Deposit Insurance Corporation, the Chairperson of the Commodity Futures Trading Commission, the Director of the Federal Housing Finance Agency, the Chairman of the National Credit Union Administration Board, an independent member appointed by the President by and with the advice and consent of the Senate.

With the exception of Bernanke, this will be a group of politically-driven bureaucrats.  How long will the important provisions last? Not long.  The only thing that might delay the weakening of the bill is the Occupy Wall Street Movement, if it gains traction.

Dodd-Frank Complexity

The Economist has made the point that U.S. legislation has become increasingly complex, e.g., Sarbanes-Oxley, EPA rules, Obama health care, and Dodd-Frank.  Why is this?  Because the industry lobbyists are at work and making the laws complex gives them the opportunity to “help” with the legislative implementation. The magazine reports that Dodd-Frank:

  • “mandates 87 studies on big and small issues, ranging from the impact of drywall on mortgage defaults to the causes of the financial crisis….deadlines have been missed…: 37 studies have yet to be completed.
  • When Dodd-Frank was passed, its supporters suggested that tying up its loose ends would take 12-18 months. Eighteen months on, those predictions look hopelessly naive.
  • …according to Davis Polk only 93 of the 400 rule-making requirements mandated by Dodd-Frank have been finalized.

Conclusion

Unlike the financial people that Sherman interviewed, a banking friend of mine concludes:

“It’s a cyclical downturn. Over the next few years, Wall Street will engineer a product that fits between the cracks. Banks lending most of the funds to a prop trading shop, and having a profit participation clause buried in it. Who knows?  Just don’t count Wall street out over the longer term.”

I think my banking friend is right.

—– ###—–

Dodd-Frank and the Size and Scope of Financial Institutions

by Bradley G. Lewis, Professor of Economics, Union College

Introduction

Large players in the financial system admit these days to feeling under siege, some going so far as to agree with commentators announcing “The End of Wall Street As They Knew It.”1 One of the latest affronts is the recently enacted Dodd-Frank financial reform act. 2 Critics, including Republican presidential candidate Mitt Romney (who wants to repeal it) and a variety of others generally skeptical about financial regulation, argue that the sheer size and complexity of the bill implies that it will be unworkable.

It is beyond the scope of this essay to look at all of Dodd-Frank’s provisions, but we will make some attempt to address a major problem: the use of sheer size by some banks and other financial institutions to enhance their own likelihood of survival by being too big to fail.

A Vibrant Financial system is Needed

Considering both the context of our current regulatory dilemmas and the evolution of our financial system, Dodd-Frank not only is correct in its aims, but includes several major provisions that are exactly the ones needed to give us a more efficient and less dangerous set of financial institutions.

And we do need vibrant financial institutions.  Our financial system since the beginning of the Republic (our first one was designed by Alexander Hamilton) has made enormous contributions to our economy becoming the world’s best in terms of per capita income. Economic historian Richard Sylla of New York University pointed out in an address in 20023 that the world economic leaders going back to the 1500’s—first the Dutch, then the British, then the Americans, with the Japanese similarly becoming the first “non-western” modern economic power—all had financial revolutions that were essential prerequisites to their later world economic leadership.

A vibrant, competitive financial system makes indispensable contributions to our economic system, so long as it functions to aid economic enterprise and enhance choices for consumers.  And to fulfill these functions, it needs to be profitable in the way that any business sector would to flourish.

Problems when the Focus of the Financial System is the Financial System

But both Wall Street and the banks periodically become like the rich, powerful, and at times even socially prestigious alcoholic whose drinking has to be hidden: they forget the world is not about them.  Kenneth Galbraith summarizes the results in his book The Great Crash 1929.  This book has been in print continuously, with an occasional new introduction, since 1955 and will amply repay reading–not least by Wall Street’s own practitioners:

As noted, at some point in a boom all aspects of property ownership become irrelevant except the prospect for an early rise in price.  Income from the property, or enjoyment of its use, or even its long-run worth is now academic.  As in the case of the more repulsive Florida lots [in a mid-1920s Florida land boom], these usufructs may be non-existent or even negative.  What is important is that tomorrow or next week, market values will rise—as they did yesterday or last week—and a profit can be realized. . . .

The machinery by which Wall Street separates the opportunity to speculate from the unwanted returns and burdens of ownership is ingenious, precise, and almost beautiful . . .

Wall Street, however, has never been able to express its pride in these arrangements.  They are admirable and even wonderful only in relation to the purpose they serve. The purpose is to accommodate the speculator and facilitate the speculation.  But the purposes cannot be admitted. (John Kenneth Galbraith, The Great Crash 1929, pp. 18-19)4

Could anyone today come up with a more concise and accurate description of the process by which the subprime mortgage boom arose, aided and abetted by wave after wave of mortgage-backed securities and extended to rising stock prices, to a fever pitch, destined to crash badly?

While at least some of the public always joins the drinking, there is rarely much question who first brought the booze to the previously sober party, in this or most earlier cases.   Then and now, the binge is generally followed by a demand by the public (and others who may have been damaged) to address the specific problems thought to have caused the distress.

Correcting the Focus – Historical Experience

Historically, we have usually taken steps to clear away the wreckage, institute some kind of new system, and/or add to restrictions in a way expected to address the problems thought to cause the last crash.  This has led us to what looks like (and sometimes is) a patchwork quilt of useful as well as unhelpful restraints and institutions, but the overall effect over time on the American economy has proven to be pretty good.  And often that is despite the conviction at the time on the part of some modern economists that the entirely wrong policy was undertaken.

Perhaps the best example is the absence of a central bank from 1833 (the demise of the second Bank of the United States at the hands of President Andrew Jackson) to the establishment of the Federal Reserve System in 1913.  This bank, it should be said, acted as a central bank and was chartered by the U.S. government but was a private institution that had branches and engaged in other banking functions. You will find few modern macroeconomists who think we were benefited by its absence, and some who positively sneer at the benighted policymakers who could not see the benefits of such an institution.

But, to refer again to the work of Richard Sylla, those critical economists might wish to look at what happened during roughly that period of time.  In 1820, a year for which comprehensive statistics on real GDP per capita (calculated by economist Angus Maddison) are available, the U.S. and France had approximately equal per capita income, somewhat ahead of Germany and Italy, 80 percent above the rest of the world, but only about 70 percent of the level of the leading Netherlands or second place United Kingdom—the countries with the first modern financial revolutions.

By 1913, the U.S. had eclipsed them all.5 Was finance the only reason?  No.  But I’d happily challenge anyone to claim that our financial system was not a major contributor.  During that time, old institutions disappeared or transformed themselves and new ones arose.  Regulation played a role in which ones succeeded, though not the only role.  Did the lack of a central bank destroy us?  Clearly not.

Correcting the Focus Today

I would not argue against having the Fed now:  big private institutions need powerful public ones to keep them honest.  But we should learn a lesson from the absence of such an institution from a period of rapid American growth that took us to the top of the world income scale:  the public that did not want a central bank, and especially one with other functions and in private hands, had good reason to suspect that it might exercise too much unchecked power.  And the public, my view, had it right.

The increasing public outrage directed at Wall Street is more than understandable given today’s situation, though only in small part because of the Fed itself, which was tasked with preventing a catastrophe and clearly failed. The main driver of our late unpleasantness, financially speaking, was the aggregation of power and money in, and the behavior of, the largest banks and the biggest diversified financial service firms like Citigroup.   Much of their influence on the body politic has come from political contributions that helped keep away what would have been sensible regulation of the derivatives market, the reining in of subprime lending activities often turned predatory, and more transparency on several fronts, and that bought de facto insurance that they would have to be helped in a crisis because they were too big to fail.

The biggest financial institutions generally have not gotten that big mainly because of their efficiency:  many studies (though there is some controversy) have established that there is little or no efficiency gain from having banks above a certain size, not that far up into the billions, compared with the trillions the biggest banks now have.  Taking into account the high compensation paid to executives of major corporations and the social damage that failure of a big institution can inflict, the benefits of really big financial services firms like Citigroup to the economy are probably negative.

To add insult to injury, after the FDIC totaled up the damage, premiums for deposit insurance rose dramatically, with a disproportionate impact on precisely the smaller unit banks or local chains that did not cause nor benefit from the large payments from the FDIC.

Support for the point about large banks not being more efficient comes from what may be considered a strange source:  former Fed Chairman Alan Greenspan.  In a 2010 address prepared for the Brookings Institution and reported in the national press, Greenspan made the following comments:

Businesses that are bailed out have competitive market and cost-of-capital advantages, but not efficiency advantages, over firms not thought to be systemically important.  For years the Federal Reserve had been concerned about the ever larger size of our financial institutions. Federal Reserve research had been unable to find economies of scale in banking beyond a modest-sized institution.  A decade ago, citing such evidence, I noted that ‘megabanks being formed by growth and consolidation are increasingly complex entities that create the potential for unusually large systemic risks in the national and international economy should they fail.’  Regrettably, we did little to address the problem.6

Greenspan has his own list of remedies, including “contingent-capital bonds” that would convert to equity if equity fell too low. That makes sense.

Enter Stage Right:  Dodd-Frank

Dodd-Frank has several remedies that are intended to, and may well, reduce the size of the biggest financial institutions and make them more transparent.  Among the most important are progressively stricter rules for capital, leverage, liquidity, and risk management as banks and other financial companies grow in size and complexity.  This will extract a toll on megabank profitability and it should:  they are the ones who helped cause the crash, and the probability of their problems affecting the whole financial system rises as they become a bigger part of it.

Dodd-Frank also establishes a Financial Stability Oversight Council including various regulators, with significant powers, including collection of better data to make emerging risks more transparent; the right in certain cases to impose a 15-1 leverage requirement; requiring plans from large, complex institutions for a rapid and orderly shutdown if they go bankrupt; and, as a last resort and with a supermajority vote, the right to approve a Fed decision to require a large, complex financial company to divest some of its assets if it poses a grave threat to U.S. financial stability.

The act also requires hedge funds and private equity investors to register with and provide information to the SEC, which would share it with the systemic risk regulator.

We never know all the consequences of new regulations until we live with them for a while, but Dodd-Frank takes aim at the right target and seems to have some good ammunition to hit it with respect to sheer size.

Conclusion

From early in our country’s history, a vibrant financial system and financial innovation have been integral to raising our standard of living.  And from early in that history we have been walking a fine line: liking a functioning, vibrant financial system but periodically concerned about it having too much power.

If Dodd-Frank survives and gives us a financial system that reduces the recent incidence of poor regulation, combined with Federal Reserve-induced advantages of size, it will have positive effect.  If it results in smaller, more efficient, more specialized, and better functioning banking and finance firms whose failure would not threaten the rest of the economy, that would be a great gift to the entire economy, including the financial sector.

Footnotes:

1Gabriel Sherman, “The End of Wall Street As They Knew It,” New York Magazine, February 5, 2012.  http://nymag.com/print/?/news/features/wall-street-2012-2/index6.htm./

2A summary of the bill can be found at http://banking.senate.gov/public/_files/070110_Dodd_Frank_Wall_Street_Reform_comprehensive_summary_Final.pdf

3His presidential address to the Economic History Association.  Sylla, Richard. “Financial Systems and Economic Modernization.”  Journal of Economic History 62, no. 2 (June 2002): 277-92.

4Can be found in several editions; the page numbers given are from the original manuscript, which has been included intact in later editions.

5Sylla, op. cit., p. 283.  Sylla believed the U.S. financial system did not function as well without the second Bank of the United States but argued (p. 285) that the system was excellent and critics since have ignored how well it financed capital formation in the nineteenth century.

6The paper can be found at http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/2010_spring_bpea_papers/spring2010_greenspan.pdf The quotations are from page 33.

—– ### —–

Dodd-Frank:  Incoherent Analytics Produces Incoherent Reform

by William K. Black, Associate Professor of Economics and Law University of Missouri-Kansas City

Introduction

Evaluating the effectiveness of the Dodd-Frank Act is difficult because so few of its implementing regulations exist and almost everything potentially effective depends on the final regulations.  The Act is vast, so it contains numerous good ideas.  If those good ideas are implemented by vigorous regulations and those regulations are enforced, then the Act will do some good.  Overall, however, the Act is most notable for its incoherence and complexity.  There was no coherent theory of what causes our recurrent, intensifying financial crises, so the Act is incoherent.  The Act often failed to heed the advice not to let the search for the perfect overcome the implementation of the good.  The Act’s complexity made it more opaque, which made it easier for bank lobbyists to add subtle clauses designed to undercut reform.  The complexity also increased the Act’s reliance on adopting detailed implementing regulations – a lobbyist-friendly venue likely to further weaken an Act that begins weak.

The Rise of the Criminogenic Finance System

Why do we suffer recurrent, intensifying financial crises and what are the grave systemic risks that we could dramatically reduce?  Those are the critical questions if one is to reform the financial system successfully.  We went from a highly effective regulatory system that provided growth, stability, and limited inequality to a system that was exceptionally criminogenic.  The status quo is so criminogenic because it is the product of theoclassical economics dogmas that have failed and were falsified by other fields before they became economics dogma (e.g., the efficient market hypothesis).

The fact that we suffer recurrent, intensifying financial crises demonstrates that we are not learning the correct lessons from prior crises.  Instead, the responses to past crises have failed to understand their primary causes.  Policies have been adopted that “double-down” on these failed dogmas to produce even more criminogenic environments.

The second phase of the S&L debacle, the Enron-era frauds, and the current crisis were all driven by epidemics of accounting control fraud.  George Akerlof and Paul Romer concluded their famous 1993 article (“Looting: The  Economic Underworld of Bankruptcy for Profit”) with this paragraph in order to emphasize the importance of fraud:

Neither the public nor economists foresaw that [S&L deregulation was] bound to produce looting.  Nor, unaware of the concept, could they have known how serious it would be.  Thus the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. Now we know better.  If we learn from experience, history need not repeat itself (George Akerlof & Paul Romer.1993: 60).

We proved, unfortunately, not to “know better.”  We made the three “D’s” (Deregulation, Desupervision and de facto Decriminalization) vastly worse in the same year that Akerlof & Romer published these words.  The Clinton administration promptly took three actions that were far more destructive than the repeal of Glass-Steagall and the passage of the Commodities Futures Modernization Act of 2000 (the Act that created a “regulatory black hole” in which credit default swaps (CDS) operated).

First, it greatly reduced the prosecution of elite bank and S&L frauds by changing the priority to health care fraud.

Second, they implemented the “Reinventing Government” initiative that was hostile to regulation and enforcement.  We were instructed, pursuant to that initiative, to refer to (and think of) the industry as our “clients.”  That is a mindset that destroys effective supervision.

Third, the Office of Thrift Supervision (OTS) terminated its underwriting regulations (which essentially banned liar’s loans) and replaced them with deliberately unenforceable guidelines.  This change made it significantly more difficult to prosecute “accounting control frauds” by lenders.

Most of the focus has been on deregulation, but desupervision and de facto decriminalization are equally criminogenic.  For example, the Federal Reserve had unique supervision authority under the Home Ownership and Equity Protection Act (HOEPA) of 1994.  Alan Greenspan and Ben Bernanke refused to use that authority – even after repeated warnings that liar’s loans were endemically fraudulent, that lenders and their agents put the lies in liar’s loans, and that such loans were increasing massively.  The Fed finally, under Congressional pressure, used its HOEPA authority to ban liar’s loans on July 14, 2008 – roughly a year after making such loans had largely ceased.  Greenspan and Bernanke’s refusal was the product of their anti-regulatory dogma.  When President Obama reappointed Bernanke as Fed Chairman and promoted Timothy Geithner it was clear that the administration was opposed to serious reform.

The other critical factor that has produced an intensely criminogenic environment is modern executive and professional compensation.  Executive compensation typically further misaligns the interests of the CEO and shareholders.  Doing so made accounting control fraud what Akerlof and Romer aptly termed a “sure thing.”  Fraudulent CEOs use compensation for more junior employees and “independent” professionals to produce the perverse incentives that generate “echo” fraud epidemics by producing a “Gresham’s” dynamic in which bad ethics drives good ethics from the markets.

Systematically Dangerous Institutions and Behavior

A major systemic risk to our economy and our democracy that became obvious as a result of this crisis was the rise of systemically dangerous institutions (SDIs).  The administration defines these roughly 20 massive banks as so large that when the next one fails (more precisely, when we admit that it has failed) it will cause a global crisis unless we bail it out.  Naturally, the administration calls them “systemically important” – as if they deserved gold stars.  The good news is that the SDIs are so large that they are grossly inefficient.  There is an obvious win-win-win.  By shrinking the SDIs to the point that they no longer pose a systemic risk we remove terrible systemic risks, improve bank efficiency, and take an important step toward restoring our democracy.

Another staggering systemic risk is posed by financial derivatives – regardless of whether those instruments are held by banks.  The amount of derivatives is so much larger than the real economy that they represent a ticking time bomb.

An Effective Dodd-Frank Act Could Have Been Written in Three Pages

The two previous sections comprise a short list of critical reform areas that Dodd-Frank should have addressed.  It did not make any of the essential reforms, though it has particular provisions that are desirable.  There were straight forward means the Act could have made the essential reforms.  It would have taken one sentence to repeal the repeal of Glass-Steagall and the passage of the Commodities Futures Modernization Act of 2000.  We could have forbidden the SDIs to grow, ordered them to shrink below the level at which they posed a systemic risk within five years, and intensively regulate them during the interim.  We could have passed a law reinstating the OTS underwriting rules as they were written before 1993.  All of this could have been done in a three-page act.

Systemic Perversion by Compensation Needs to be Addressed

Executive and professional compensation is more complex than simply establishing the systemic structure that a short-form Dodd-Frank would achieve.  Executive compensation has no perfect answer but the general answer is clear – no extraordinary pay (perhaps an annual cap of $300,000 on all forms of compensation, including perks and loans) that is not based on long-term (a decade) performance.  Additionally there should be claw back for any fraudulent firms.  Loan compensation must be based on long-term loan performance, not volume and yield.  Professional compensation can only be fixed by dealing with the agency problem (i.e., the audit partner – auditor – must have incentives that are antithetical to the interests of the firm being audited).  In general, this means that one must have the government assign the audit firm from a list of acceptable firms and must monitor the audit firms’ performance and exclude firms that cannot audit effectively.

Conclusion

In addition to financial system structure and removing perverse compensation incentives, other problems remain.

Dealing with derivatives effectively is the most complex reform.  If the U.S. banned derivatives (and there are helpful derivatives of long usage in agriculture, for example), other nations would continue to allow them and U.S. firms would continue to use them.

Finally, the Volcker rule is desirable but even if it works perfectly it cannot prevent a catastrophic financial crisis arising from losses experienced by entities that are not banks.  Such firms must not be allowed to achieve status that impacts systemic risk.

—– ### —–

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Related Articles

Analysis and Opinion about banks and banking

Analysis and Opinion articles by Elliott Morss

Analysis and Opinion articles by Bradley G. Lewis

Analysis and Opinion articles by William K. Black

About the Authors


elliott-morss-photo1Elliott Morss has a broad background in international finance and economics. He holds a Ph.D.in Political Economy from The Johns Hopkins University and has taught at the University of Michigan, Harvard, Boston University, Brandeis and the University of Palermo in Buenos Aires. During his career he worked in the Fiscal Affairs Department at the IMF with assignments in more than 45 countries. In addition, Elliott was a principle in a firm that became the largest contractor to USAID (United States Agency for International Development) and co-founded (and was president) of the Asia-Pacific Group with investments in Cambodia, China and Myanmar. He has co-authored seven books and published more than 50 professional journal articles. Elliott writes at his blog Morss Global Finance.


Brad Lewis is Professor of Economics at Union College in Schenectady, NY, where he teaches courses in financial markets and institutions, international trade and finance, monetary economics, and urban redevelopment. He has also held senior-level visiting positions for a term or more at Carleton College and Skidmore College in the United States and at Kansai Gaidai University in Japan. He is a long-time member of and has occasionally co-chaired the Columbia University Seminar in Economic History and is Vice Chair of the Schenectady (N.Y.) Metroplex Development Authority.
Curriculum Vitae.


William K. Black is Associate Professor of Economics at University of Missouri, Kansas City. From 1990-1994 Prof. Black was Senior Deputy Chief Counsel, Office of Thrift Supervision, which was formed in 1989 to supervise the thrift industry following the Saving & Loan crisis. He is the author of the widely acclaimed book “The Best Way to Rob a Bank is to Own One.” Full bio here


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